The VCFI is the index created by the Port Authority of Valencia to reflect the evolution of the market rates for the export of full containers by sea from Valenciaport. VCFI stands for Valencia Containerised Freight Index. This index will serve shippers as a tool to predict the evolution of freight rates within their markets of interest, which is a key determinant of the cost of their export operations. On the other hand, it will also be useful for operators that offer such services, providing a benchmark for the evolution of their own freight rates and those on the market.

VCFI General

The Valencia Containerised Freight Index fell by -2.08% in September compared with August. It closed at 1,186.74 points. Since the beginning of the historical series (January 2018), it has accumulated a growth of 18.67%. In the Africa West Coast (-39.30%) and Latin America Atlantic (-14.69%) regions, the decline in freight rate levels was generalised and more pronounced.

This is in line with the slowdown in the recovery of the global economy. The recently published United Nations Conference on Trade and Development (UNCTAD) report on Trade and Development estimates an average growth of 2.4% for the global economy in 2023. This indicates a slowdown in economic growth in many regions compared to the 3% average growth seen in 2022. Regarding the primary drivers of the global economy, the report emphasises the economic state in Europe, where growth has been impeded by excessive levels of inflation. Furthermore, it brings attention to the current challenges facing Germany, which has been previously recognised as Europe’s driving force, due to a technical recession.

Regarding the Americas, it is worth noting that the continent has demonstrated noteworthy resilience in the face of consumer spending and the rejection of fiscal austerity measures. As for the Asian powerhouse, despite the lifting of pandemic restrictions and an expected swift recovery, domestic demand and private investment remain weakened. However, the same organisation highlights that this economy has greater fiscal policy flexibility, enabling it to address these challenges with greater agility. Against this backdrop, there is no doubt that shipping serves as a clear indicator of the strengths and weaknesses of the economic environment. The current global economic downturn is seen in the development of container traffic. According to the latest RWI/ISL Container Throughput Index, container traffic is still recovering, supported by container traffic from Chinese ports. However, this is being held back by the development of European traffic

VCFI Western Mediterranean

The sub-index for the Western Mediterranean demonstrates a 4.64% rise compared to the month before, following a five-month long decrease. It has therefore accumulated 1,483.44 points, signifying a collective progression of 48.34% from the commencement of the series in 2018.

For Valenciaport, there has been a 26.2% increase in export volume to Morocco compared to the previous month. Exports to Tunisia have decreased by -33.7%, while exports to Algeria remain low due to long-standing geopolitical issues that have been going on for some time now.

VCFI Far East

In the Far East region, there was a further decrease of -0.24% observed, although more subtle. It closed at 918.71 points this month. There has been a cumulative growth of -8.13% from the start of the series in January 2018. Meanwhile, exports from Valenciaport to China, the primary trading partner, have shown a decline based on the most recent data.

Furthermore, in the upcoming weeks, the forthcoming Golden Week in Asia at the beginning of October – during which factories shut down and there is less demand for container shipments to and from Asia – shipping lines are exploring the possibility of cancelling some journeys to adapt their capacity in anticipation of the expected decline in demand.

According to data from Sea Intelligence, when analysing capacity forecasts on the Transpacific route for the four-week period covering Golden Week and the following three weeks, shipping lines have planned reductions of 14.1% on the Asia-North America West Coast route, 16.1% on the Asia-North America East Coast route, 19.9% on the Asia-North Europe route, and 21.0% on the Asia-Mediterranean route.